ESOP ADVISORY
Employee Stock Ownership Plan (ESOP) Advisory | Dubai & UAE
Empowering talent through equity. Enhancing enterprise value in Dubai and the UAE.
Why ESOPs Matter in the UAE & Dubai
For corporates and tech-led firms in the UAE, a properly structured ESOP is a strategic driver of employee engagement, retention and value creation.
- Equity-based incentives align employee interests with shareholder goals and long-term growth.
- Dubai and UAE free-zones (such as Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM)) offer flexible frameworks for share schemes and phantom programmes.
- With the implementation of UAE corporate tax and evolving regulatory developments, tailored advisory is essential.
Our Service Suite for Dubai & UAE ESOP Implementation
We offer end-to-end ESOP advisory including: structuring, simulation, drafting and implementation—designed for Dubai-based companies and international groups operating in the UAE.
ESOP Structuring & Design
We craft bespoke ESOP frameworks that reflect your business model, growth stage, ownership objectives and Dubai/UAE regulatory context.
Key deliverables include:
- Selection of plan type: Employee Share Options, RSUs, Phantom Stock, Performance-based awards
- Design of vesting schedules, cliffs, performance triggers and exercise mechanics
- Dilution modelling and governance (pool size, refreshes)
- Legal and regulatory compliance for UAE mainland / free-zone entities (including DIFC, ADGM) The Jurist+1
Outcome: A clear, compliant and strategically aligned ESOP blueprint.
Financial Simulation & Valuation
We provide detailed simulation and valuation services to quantify impact and support decision-making.
Scope of analysis:
- Cap-table modelling: pre- and post-ESOP, dilution impact, future rounds
- Valuation methods: DCF, market comparables, option pricing models, fair-value assessments per IFRS 2 / UAE financial reporting. Aviaan+1
- Scenario modelling for exits, secondary transactions or employee exercise events
- Dashboards and reporting: visualising metrics such as employee ownership, cost of awards, impact on shareholder value
Deliverable: A professional report with actionable insights based on Dubai/UAE tax & accounting environment.
Drafting Documentation & Legal Support
We draft and coordinate all required legal and regulatory instruments for Dubai/UAE ESOPs.
Documents we prepare:
- ESOP Policy & Plan Rules (eligibility, vesting, leaver treatment, change-of-control clauses)
- Grant letters, option/award agreements, employee communications
- Board resolutions, shareholder approvals, share-issue documentation (especially for UAE public or free-zone entities) com
- Regulatory filings and adviser coordination for mainland / free-zone jurisdictions
Benefit to you: Legal clarity, minimised risk, and professional execution in the UAE market.
Implementation & Ongoing Advisory
Beyond launch, we assist with:
- Employee communication and onboarding of plan participants
- Cap-table updates, monitoring refresh needs, refresh strategy
- Accounting support (IFRS 2 expense recognition, disclosures) and tax planning in UAE context partners
- Governance, leaver treatment and secondary liquidity mechanics
Goal: A sustainable ESOP ecosystem aligned with your strategic growth in Dubai/UAE.
Why Partner with ValuationIndia in Dubai/UAE
- Local-market expertise: Deep understanding of UAE corporate, regulatory and tax frameworks including free-zones.
- End-to-end service: From structuring to implementation and beyond — one provider covering all major work-streams.
- Professional execution: Detailed simulations, robust legal documentation, best-practice governance.
- Forward-looking vision: We align ESOP design with your exit strategy, global talent recruitment and growth trajectory.
- Neutral and objective advice: We serve as your trusted advisor, not as product-seller.
Typical Engagement Roadmap
- Initial workshop
- Updated cap-table
- Draft model
- Simulation report
- Dilution dashboard
- Summary memo
- Policy document
- Agreements
- Board/shareholder resolutions
- Employee pack
- Cap-table updates
- Governance handbook
- Annual review memo
- Refresh model
- Advisory update
Dubai & UAE ESOP Context
Can UAE companies issue ESOPs to employees?
Yes. Under UAE law (e.g., Federal Decree‑Law No. (32) of 2021 on Commercial Companies and relevant free-zone frameworks), employee share-incentive schemes are permitted, subject to conditions.
What jurisdictions are best for ESOPs in Dubai/UAE?
Free-zones such as DIFC or ADGM allow more flexible structures; mainland companies can also implement ESOPs but may face more administrative constraints.
What is a typical pool size and vesting structure?
For many UAE-based startups, an ESOP pool of 10-15% fully diluted is common; a 4-year vesting with 1-year cliff remains standard.
How do we handle accounting and tax implications in UAE?
Granting equity triggers share-based payment expense under IFRS 2. With UAE corporate tax in place, structuring and timing matter for optimal outcome.
What happens on exit, change of control or employee departure?
Leaver treatment, acceleration triggers, and repurchase mechanisms must be clearly defined in plan rules and executed in accordance with UAE law.
